Summa Industries of Torrance, Calif., has retained investment bank U.S. Bancorp Piper Jaffray of Minneapolis for advice on how to maximize stockholder value. Summa said it is considering alternatives, including sale of the company, but has not identified a particular path.
Directors say Summa's stock is undervalued and during the past year ``has not reflected the company's true value,'' said James Swartwout, chairman and president.
Swartwout attributed the disparity to ``the stock market's discounting of microcap companies. This is believed to be a serious long-term issue.''
He does not regard the recent economic slowdown as a long-term issue.
Summa's shares on the Nasdaq National Market have traded between $6.75 and $14 in the past year. Summa closed Aug. 7 at $11.40.
Summa had profit of $1.3 million on sales of $32.7 million for the third quarter, ended May 31, vs. profit of $2.1 million on sales of $33.3 million for the previous year's corresponding quarter.
Summa is an injection molder and extruder of tubing, profiles and sheet. It has six business units; two are being linked as an optical products group, effective Sept. 1.
In April, Summa announced plans to close facilities in City of Industry, Ontario; Rancho Cucamonga, Calif.; and Broadview, Ill.; and to consolidate the operations with other locations.
Swartwout said Summa employs about 770 and has another 180 in temporary positions.